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The Owens Company budgeted sales of 20,000 printers at $90 per unit last year. Variable manufacturing costs were budgeted at $46 per unit, and fixed manufacturing costs at $12 per unit. A special order for 1,000 printers at $72 each was received by Owens in April. There is enough plant capacity to meet these additional units without incurring any additional fixed manufacturing costs; however, the production would have to be done on an overtime basis at an estimated additional cost of $5 per printer. Acceptance of the special order would not affect Owens' normal sales and no selling expenses would be incurred. What would be the increase to net operating income if the special order were accepted? O $21,000 O $9000 O $14,000 O $10,000 O none of the above

The Owens Company budgeted sales of 20,000 printers at $90 per unit last year. Variable manufacturing costs were budgeted at $46 per unit, and fixed manufacturing costs at $12 per unit. A special order for 1,000 printers at $72 each was received by Owens in April. There is enough plant capacity to meet these additional units without incurring any additional fixed manufacturing costs; however, the production would have to be done on an overtime basis at an estimated additional cost of $5 per printer. Acceptance of the special order would not affect Owens' normal sales and no selling expenses would be incurred. What would be the increase to net operating income if the special order were accepted? O $21,000 O $9000 O $14,000 O $10,000 O none of the above

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The Owens Company budgeted sales of 20,000 printers at $90 per unit last year. Variable manufacturing costs were budgeted at $46 per unit, and fixed manufacturing costs at $12 per unit. A special order for 1,000 printers at $72 each was received by Owens in April. There is enough plant capacity to meet these additional units without incurring any additional fixed manufacturing costs; however, the production would have to be done on an overtime basis at an estimated additional cost of $5 per printer. Acceptance of the special order would not affect Owens' normal sales and no selling expenses would be incurred. What would be the increase to net operating income if the special order were accepted? O $21,000 O $9000 O $14,000 O $10,000 O none of the above
Transcribed Image Text:The Owens Company budgeted sales of 20,000 printers at $90 per unit last year. Variable manufacturing costs were budgeted at $46 per unit, and fixed manufacturing costs at $12 per unit. A special order for 1,000 printers at $72 each was received by Owens in April. There is enough plant capacity to meet these additional units without incurring any additional fixed manufacturing costs; however, the production would have to be done on an overtime basis at an estimated additional cost of $5 per printer. Acceptance of the special order would not affect Owens' normal sales and no selling expenses would be incurred. What would be the increase to net operating income if the special order were accepted? O $21,000 O $9000 O $14,000 O $10,000 O none of the above
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